SUSAN FREIDMAN, CO-HOST: And I'm Susan Freidman. Eastern Afghanistan continues to be the target of U.S.-led airstrikes. A number of suspected al Qaeda and Taliban members are believed to be hiding in a sparsely populated area near the Pakistani border. U.S. military leaders say American troops in Afghanistan might cross the border into Pakistan to search for fugitive al Qaeda leaders, including Osama bin Laden.

MCMANUS: Yes. In addition, a delegation of U.S. senators met Tuesday with Pakistani leader, Pervez Musharraf. The senators, who had been touring Asia, say they spoke at length about the touchy relationship between nuclear rivals, India and Pakistan. They hope a speech expected by Musharraf this week will calm matters.

Our Joel Hochmuth reports.

(BEGIN VIDEOTAPE)

JOEL HOCHMUTH, CNN CORRESPONDENT (voice-over): World leaders will be paying close attention to a speech expected this week from Pakistani President Pervez Musharraf. Both his country and India have amassed thousands of troops along their border in the wake of terrorist attacks against Indian targets October 1 and December 13 that killed more than 50 people.

India blames terror groups it says are backed by Pakistan, and it especially is looking for assurances Pakistan will do all it can to prevent such attacks in the future.

ARUN JAITLEY, INDIAN MINISTER: We are looking for a response in terms of action, and in terms of action, the response which we want now is terrorism must actually come to an end.

HOCHMUTH: A delegation of U.S. senators visited with Musharraf Tuesday to discuss the ongoing crisis between the two countries. They report some reason for optimism, but no breakthroughs.

SEN. JOE LIEBERMAN (D), CONNECTICUT: The meeting with President Musharraf was warm. It was direct. And from my point of view, it was quite encouraging.

SEN. JOHN MCCAIN (R), ARIZONA: We, of course, went -- talked a great deal about the situation in Kashmir, and we are aware that President Musharraf will make a major speech in the next two or three days, which he referred to. And he is appreciative of how important that speech is. We obviously encouraged him to do whatever he can to renounce terrorism and to diffuse tensions in the region and the area of Kashmir.

HOCHMUTH: The current crisis has put Musharraf in a tight spot. Some reports say he is flirting with political suicide. On the one hand, he must take action against terrorists operating out of his country to please India and the West. But on the other hand, he can't appear to Muslims in his own country to be bound to India's demands. In a meeting with British Prime Minister Tony Blair, Monday, he appeared to address the concerns of that first audience.

GEN. PERVEZ MUSHARRAF, PRESIDENT OF PAKISTAN: Pakistan rejects terrorism in all its forms and manifestations and has fully cooperated with the international coalition against terrorism in that spirit.

HOCHMUTH: But the question is whether such a statement includes what Pakistan, til now, has called freedom fighters operating in Kashmir. Kashmir is the territory where Pakistan and India meet. The fighting takes place mainly in territory under Indian control, but both nations have claimed it as their own for more than 50 years. They have gone to war twice over it already.

Musharraf admits his government supports rebels there morally and diplomatically in their fight to overthrow Indian rule, but not militarily. India says Pakistan can't say it support the U.S. war on terror without shutting the Kashmir militants.

JAITLEY: Terrorism cannot have one meaning on Pakistan's western border, and an entirely different meaning on Pakistan's eastern border. One man's terrorism cannot be another man's freedom struggle.

HOCHMUTH: India wants action, not just words from Musharraf. Pakistan has made a series of arrests in connection with the suicide attack on India's Parliament last month, even though many Pakistanis aren't convinced Kashmir extremists were responsible.

Musharraf himself is reportedly concerned his country will be held accountable every time there is an attack, even from extremists his government can't control.

Still, hopes are high his upcoming speech will spell out a new attitude toward the dispute over Kashmir, an attitude that could mean the difference between war and peace.

LIEBERMAN: I believe that -- I hope and believe that they will be bold and principled, and that they will be so bold and principled and fresh that they will encourage a response from the Indian government. Most particularly, hopeful that both nations -- both allies of the United States, good friends and allies of the United States will move some of their troops, the more than million soldiers on the border between India and Pakistan away from the border.

HOCHMUTH: While many outsiders are optimistic war can be avoided, many Pakistanis are preparing for the worst. For that, we go to Ash-Har Quraishi.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

ASH-HAR QURAISHI, CNN CORRESPONDENT (voice-over): Sirens sounding. Bombs. Ambulances. The realities of war. But this is not real. It is a rehearsal for what many in Pakistan fear could be next -- all out war with India.

Civil defense authorities all over the country are preparing for war, and it's not the first time. India and Pakistan have been through this before.

MAYOR MIAN AMIR, LAHORE: As we did earlier in two wars, we will -- we can face and we will face any of their attacks, air or ground attack, whatsoever it is.

QURAISHI: Lahore, Pakistan's second largest city, is considered particularly vulnerable. It sits just over 10 miles from the Indian border.

(on camera): If the two nations do go to war this time, many worry it could be the worst confrontation yet, and Pakistanis say they're ready for anything.

UNIDENTIFIED FEMALE: If this is the way things keep on going, I think there will be a war, because both sides are very frustrated at the moment, I think.

UNIDENTIFIED MALE: I don't think anybody is ready for war, because you see, it would be very easy for things to just totally go out of control, and maybe even go nuclear. I don't know. I mean, I am sure nobody wants that.

QURAISHI (voice-over): Officials say Pakistan must be ready for anything that comes. Fire departments, for instance, drill for the possibility that war could spill over into civilian areas. Civil defense organizations say bomb squads are ready to respond at short notice. Local governments are conducting their own disaster drills. In hospitals, doctors and nurses are on full alert.

DR. MURNTAZ HASSAN, MAYO HOSPITAL: War is the worst thing anybody can dream of, but if war is thrust upon us, we are ready to face the challenges in the form of accidents, in the form of wounds, in the form of war injuries.

QURAISHI: Hope is still high that these drills and preparations don't turn into reality. But the recent summit in Nepal and the visit by British prime minister to the region, have done little to calm fears here. Many in Pakistan say for the time being, the hovering war clouds above must be taken very seriously. (END VIDEOTAPE)

FREIDMAN: India and Pakistan have fought three wars since their independence from Britain in 1947, two of them were over Kashmir, a region that's seen more than its share of war during the past few decades. Many Kashmiris have unfortunately found themselves caught in the line of fire; their fates uncertain.

Ash-Har Quraishi returns with this report.

(BEGIN VIDEOTAPE)

QURAISHI (voice-over): It's a way of life on the line of control, in violent exchanges between Pakistani and Indian forces, civilians on both sides, are often caught in the crossfire.

Near Khotley in Pakistan-controlled Kashmir, this girl's mother was killed when Indian shells exploded near her.

UNIDENTIFIED FEMALE (through translator): Indian soldiers fired. When the firing started, I was near the door. There was a lot of heavy firing. My mother and aunt were outside. A bullet hit my back and leg.

QURAISHI (on camera): This region of mountains and valleys was at the heart of the original dispute between India and Pakistan. The first outright war between the two countries was fought over who would control it. And over 50 years later, it remains a political sore spot, not only for Pakistanis and Indian, but for some Kashmiris as well.

AMANULLAH KHAN, JAMMU & KASHMIR LIBERATION FRONT: This India and Pakistan business doesn't have only two parties. It has three -- three. Basic party is Kashmiris.

QURAISHI (voice-over): Groups, like the Jammu Kashmir Liberation Front, are calling for an independent Kashmir, dismissing a 1948 U.N. resolution which would hand the region over to India or Pakistan.

KHAN: Why shouldn't I become an independent man? Those resolutions don't have any provision for me to even work for independence.

QURAISHI: Independence, say both governments, and even some Kashmiris, is out of the question.

SULTAN MAHMOOD CHAUDHRY, FMR. PRIME MINISTER, PAKISTAN-CONTROLLED KASHMIR: I think that's what the resolution says, that the future of Kashmir has to be determined according to the free will and the wishes of the people of Kashmir. But we are only given two choices in those resolutions, India and Pakistan. And the majority of the people do want to join with Pakistan.

QURAISHI: Neither the diplomatic game, nor the military alert, has succeeded in solving problems here. Islamabad continues to crack down on what India calls Pakistan-based militant groups operating from inside Kashmir. So far, New Delhi has not been satisfied. Accusations still fly, war still looms, and the fate of the Kashmiris is still uncertain.

Ash-Har Quraishi, CNN, in Pakistan-controlled Kashmir.

(END VIDEOTAPE)

MCMANUS: President Bush went back to school yesterday, traveling to the Commonwealth of Massachusetts to sign a $26 billion plan to increase spending on education. The plan affects 48 million public school students across America.

And as Kitty Pilgrim reports, it's not just the money, it's the concept behind it that has leaders applauding the new approach.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Educators are today saying the new law gives a bigger bang for each education buck, simply because of the accountability factor. The more than $26 billion law sends more money to the states, an increase of about $8 billion. In addition, the new law sets up a new money flow, helping states pay for new testing to be done in the schools.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And so, therefore, if you receive federal money, in return for federal money, the states -- not the federal government -- the states must develop a test for third through eighth graders on reading and math.

(APPLAUSE)

BUSH: For the first time at the federal level, we've asked a simple question: Is our money being spent wisely? Are people learning?

PILGRIM: The new law attempts to level the playing field between wealthy and poor students. Next year, children in 3,000 underperforming schools will be eligible for tutoring from a variety of sources, including religious institutions. The attempt to rescue underprivileged students is not a unique concept, but the new plan is more results-oriented.

MARCI KANSTROOM, DIRECTOR OF RESEARCH, MANHATTAN INSTITUTE: The federal government sends money to states and to individual school districts for different federal programs, but the big new chunk of money for a new program is the state testing and accountability part. And for that, the federal government will send the money directly the states to develop a whole set of new tests.

PILGRIM: According to the National Education Association, because of the current economic slump, states have cut $11 billion from education budgets in the past year. States with shrinking budgets may opt to band together to cover some of the testing development costs. (on camera): The U.S. secretary of education calls the new law -- quote -- "A whole new way of doing business." And in effect, it does treat education more like a business, making it more results- oriented and with a firmer eye to the bottom line.

Kitty Pilgrim, CNN Financial News, New York.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

ANNOUNCER: Jack Smiley, from The Colony, Texas, asks, "What specifically are the powers and responsibilities of the Office of Homeland Security?"

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: The Homeland Security Adviser's job is to coordinate government efforts to protect Americans from terrorism. That includes guarding against bioterrorism, like the recent anthrax attacks; guaranteeing travel safety; protecting power plants and other public facilities; ensuring medical preparedness for an emergency; and investigating terrorist threats.

For such a big job, some people believe the Homeland Security adviser should be a Cabinet officer, with his own organization and his own budget. But the White House believes that the Homeland Security adviser -- that's former Pennsylvania Gov. Tom Ridge -- has all the authority he needs, based on Mr. Ridge's relationship with President Bush, who is just a few steps down the hall.

(END VIDEOTAPE)

MCMANUS: Now to the war in Afghanistan. U.S. forces have captured two senior al Qaeda members near a cave complex in the eastern part of the country. Military officials say the two men may have intelligence that could help prevent future al Qaeda operations.

CNN's Jamie McIntyre has more on that, and other developments on the military front.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): Add two more to the growing list of captured al Qaeda and Taliban forces, who will soon be transported to the U.S. Navy base in Guantanamo Bay, Cuba.

The Pentagon says U.S. troops, still scouring the former al Qaeda stronghold near Khowst, found the two high-ranking al Qaeda members in a group of 14 people who were captured without resistance. And with every capture comes more intelligence.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: Laptop computes, cell phones, some small arms and training documents were also found and returned to Kandahar with the two detainees, and we're exploiting those as we speak. MCINTYRE: The Pentagon is now preparing to move the first of more than 360 detainees, under U.S. custody in Afghanistan, to Guantanamo. Pentagon sources say the prisoners will be flown out of the Bagrham Air Base on Air Force C-141s with security forces that will greatly outnumber them. The Pentagon says the prisoners are extremely dangerous, because of their fanatical beliefs and hatred of the United States. But some, apparently, are talking.

MYERS: Indeed, we are getting some intelligence on this. We think we have thwarted some attacks, but to do into any more detail starts to give away what we know, and what they don't know we know. And so, we've got to be very, very careful.

MCINTYRE: Pentagon officials are also being more careful in describing the way Army Sergeant First Class Nathan Chapman was killed last week. Initially described as an ambush that occurred after a meeting with friendly Afghans, now officials are saying they're not so sure what happened.

Meanwhile, the U.S. has completed its search of caves in the Tora Bora area, finding evidence Osama bin Laden has been there and gone. And new airstrikes were ordered Monday near the Zawar Keely training complex, when another compound was discovered by U.S. ground troops. An up-close look has revealed the complex was much bigger, with more extensive underground facilities than U.S. intelligence thought.

(on camera): And CNN has learned the preliminary findings of an investigation of a December 5 friendly fire accident near Kandahar, which concludes, tentatively, that U.S. soldiers on the ground mistakenly called in airstrike on their own location. Three Green Berets were killed.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

MCMANUS: While things are improving for women in Afghanistan, it's still a struggle. Many have lost husbands and are toiling to raise young children alone. The men, both young and old, have disappeared in civil wars over the past decade, leaving behind large numbers of widows.

John Vause has their story.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice over): In the cold and the dust, they wait patiently, thousands of widows gathered in what was a teacher's college. Like so many buildings in Kabul, it's been heavily bombed during the years of war. Just a few walls remain standing. They're here for their monthly rations, the most basic of supplies.

AWADIA MOHAMMED, CARE: This is wheat, here is lentil, and this is vegetable oil.

VAUSE: Awadia Mohammed runs the women's program for CARE in Afghanistan. Every month, she tries to feed 10,000 widows and their children, an estimated 60,000 hungry mouths.

(on camera): This is what they get and this is for a month, is that right?

MOHAMMED: Yes, this is for a month, and actually provides half of the food requirements for the whole month.

VAUSE: Only half?

MOHAMMED: Only half, for a family of five persons.

VAUSE (voice-over): For the rest of the month, the widows and their children are on their own. A few clean homes, others sew. But in a country where women were banned from working for the last five years, jobs are scarce.

"In the Taliban period we starved," Razea, mother of three told me. "We had no other choice. We had to stay at home."

(on camera): All these women are grateful for the food. They couldn't survive without it. But ask them what they really want and they'll tell you a job, a chance to earn a good living so they can support themselves and their families without help from anyone.

(voice-over): But when the Taliban were in power, CARE was secretly training women for work, small groups, no more than 100 at any one time, hidden in homes across the country, taught mainly sewing, knitting, and bead making, their products sold in local markets.

Bibi Jan's husband was a shopkeeper killed in the crossfire of two warring factions almost ten years ago. She has four daughters and two sons and is one of the few women being trained to work.

"Without the project assistance, we would die. The rations are helping, but it's not enough," she says. "Hopefully in the future, I can work in a factory."

CARE is now extending its vocational training to help change the lives of some of the estimated 50,000 widows in Kabul alone. Right now, virtually all of them dependent on aid.

John Vause, CNN, Kabul.

(END VIDEOTAPE)

FRIEDMAN: They were closer to the World Trade Center than any other school in the city. Their experience has not been well publicized, but now, four months after the events of September 11th, we talked to students from the High School of Economics and Finance.

Mara Wilcox has that story in Part I of The School With No Home.

(BEGIN VIDEOTAPE)

MARA WILCOX, CNN CORRESPONDENT (voice-over): Just one-and-a-half blocks away, they were close enough to feel it.

AUSTIN CANTRELL, AGE 17: There was a huge vibration and noise. I think that was when the second plane hit. And a few minutes later, they evacuated the building, you know, floor by floor, told everyone to get out.

WILCOX: Thirteen hundred students from the High School of Economics and Finance, and its sister school, Leadership, were among the masses of New Yorkers fleeing to safety on September 11th.

SHIOMARA ARROIO, AGE 17: I do remember running, and I thought that -- I thought that day honestly that I was going to die. It felt really bad, like I didn't think I was going to go home.

WILCOX: Many of the students described their experience that day as unreal. A few said that they felt like they were in a horror movie.

SHEDISHA MATTHIAS, AGE 17: When the first tower went down, the sky just went black, and there was smoke everywhere. Everybody was covered in soot. It was burning our eyes, noses, mouth. It was all over our bodies. It was very scary.

WILCOX: Many kids have had nightmares. Others felt scared leaving home the next day. But as horrific as it was, the students know they have experienced history.

MICHAEL WONG, AGE 17: I kind of finally have like a story, you know, to my life. I can maybe tell my grandchildren I went through this. And maybe it can help them along their way and say that, you know, maybe some of the struggles in your life, it's not so bad.

WILCOX: And they have gained empathy for the struggles of others.

CANTRELL: In history class, you always learn about people who grow up in war-torn nations, and to be in big battles or something. I mean, and it's just -- that experience shows me what they go through every day. I mean, it's just like some days I just wake up sort of scared of, you know, what might happen today, I mean, because of this. It's just -- you know, it has just changed everything. Sometimes I just don't feel secure.

WILCOX (on camera): For the kids at Economics and Finance, their struggle continues. They have not been back to their school since September 11 and are currently sharing space at this public school building miles away. It has not been an easy adjustment, and they still have a tough road ahead.

Mara Wilcox, CNN Newsroom, New York.

(END VIDEOTAPE)

MCMANUS: We continue to follow the students of ground zero tomorrow with Part II of Mara's report, so please join us then. FREIDMAN: Thanks, Mike. Now we move a few blocks up from the school that Mara talks about, to the lines of people waiting to see ground zero. It has been four months, but the people are still coming to pay their respects.

MCMANUS: Yes. And we'll also learn more about the debate over what to do with the World Trade Center site. Some want to rebuild office towers; others want a memorial.

Garrick Utley has that report, but first, here's Brian Palmer.

(BEGIN VIDEOTAPE)

BRIAN PALMER, CNN CORRESPONDENT (voice-over): The long, long lines snaking through Lower Manhattan to see where the World Trade Center once stood, is proof that so many of us are not yet ready to look away, to move on from September 11th.

(on camera): So at this point in the line, people have been waiting about an hour and a half, two hours. The line continues for another two and a half blocks or so, but it's come from a distance of about eight blocks. It goes around the corner, around several other corners and around a few more corners.

(voice-over): David Crosby, a pastor from New Orleans, and his wife Janet were among thousands waiting patiently to view the site.

PASTOR DAVID CROSBY, NEW ORLEANS, LOUISIANA: I'd say it's the most important nation-shaping event in my lifetime.

PALMER: Standing just a few steps away from the Crosbys, Dorothy and Sherman Dillard of Tulsa, Oklahoma.

DOROTHY DILLARD, TULSA, OKLAHOMA: I could feel it at a distance, but I really want to feel it up close.

PALMER (on camera): I'm trying to get a sense of why people need to actually come her, why television, why magazines just aren't sufficient. Why -- why do you physically need to be present?

TIM BOS, OWNER, TELEPHONE COMPANY: You know, it's just a moment in history and I think it helps solidify all the events to be here.

PALMER: The Daniels family made the trip from Wichiker, Michigan.

MR. DANIELS: I'll see what kind of reaction I have when I actually see it. It just kind of looks like a big construction thing.

MARIEL FERNANDEZ, EXECUTIVE ASSISTANT: It looks like a hole. It looks like hell. It's bad. It looks really bad.

PALMER: Mariel Fernandez wrote her own memorial on the bare plywood of the viewing platform. Others remember friends, loved ones, and colleagues. This man pinned a tribute to Firefighter Joseph Agnello of Brooklyn's Engine 205, Ladder 118, which lost nine men. The remains of Firefighter Agnello, Peter Vega, and Lieutenant Robert Regan were recovered on New Year's Day.

ANTHONY CARBONE, NEW YORK FIREFIGHTER: It's opening old wounds. You know, you start to get to that point where, you know, time heals a little bit and you -- but you know, the fact of the matter is, is that you really want them back. You want them out of there. You want them to be able to place them in a grave and know that there's a place of rest for them.

PALMER: Firefighters Leon Smith and Vernon Sherry are still missing. So the men suit up on their own time for another trip to Ground Zero. Four months along, only about 600 bodies have been recovered and identified, of the 3,000 people killed on September 11th, a very solemn reminder that the work and the mourning at Ground Zero is far from over.

Brian Palmer, CNN, New York.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

GARRICK UTLEY, CNN CORRESPONDENT (voice-over): It is already a shrine, with its pilgrims, with its memories that are more powerful than any memorial that will be erected here.

Look at the 16 acres where the World Trade Center stood and ask which comes first, a memorial or rebuilding. The answer from city officials is both.

JOHN WHITEHEAD, CHMN, NYC REDEVELOPMENT: I visualize other office buildings being built in the broad -- in the general region of 40 or 50 or 60 stories.

MONICA IKEN, WTC WIDOW: It's going to be about money obviously. That's just the way it is. The world is about money and the towers were about money. It was a financial district.

UTLEY: Monica Iken's husband Michael died in the south tower, the second building to be struck. His wife has become an outspoken voice among the families of the victims who want the entire site turned into a memorial.

IKEN: Originally people were saying well, okay, we have it maybe just where the tower stood, which is about six acres and make that into something to remember the lives that were lost or we could then build around it. However now we're seeing that that's -- that can't be what it is. It needs to be the 16 acres of land.

UTLEY: And what should stand on those six or 16 acres? Some argue that the ruin should be incorporated into a enduring eloquent monument, but the visible ruins are almost gone now. In fact the cleanup is moving ahead faster than expected. That puts pressure on deciding what should be built here.

One proposal for a memorial would be twin towers of light illuminating the nighttime sky.

RAYMOND GASTIL, URBAN PLANNER: Do we want images of anything? Is it abstract? Is it -- does it -- is it a place of reflection or is it a place of activities? Are we going to have a sort of interactive quality to it? You know, are we more interested in the museum? Are we more interested in a kind of you know quiet blank slate that we can then project our own feelings and concerns on?

UTLEY: But then there are also the feelings and concerns of Larry Silverstein, the lease holder of the World Trade Center, who has a legal right to rebuild and make money, and city leaders including the mayor who want to rebuild the economic vitality of lower Manhattan.

Above all, there is the discomforting fact that what was the center of commerce and capitalism is now a burial ground for more than 2,000 people, including Monica Iken's husband.

IKEN: There's going to be conflict. I will stand there -- I mean I see a chain developing of loved ones and people who feel the same way I do, as well as the other groups, who all feel strongly about that has to be sacred land, and we'll stand there until they -- until they do what we need to do.

UTLEY: The crowds that still come to daily to visit, to leave personal thoughts, are reminders of how a tragedy pulled people together. Will a memorial now pull them apart?

Garrick Utley, CNN, New York.

(END VIDEOTAPE)

FRIEDMAN: That's a debate that will no doubt continue for some time.

MCMANUS: Yes, absolutely, Susan. And we will be there for sure to cover it for you. In the meantime, I am Michael McManus.

FREIDMAN: And I am Susan Freidman. We'll see you back here Thursday.

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